Yahoo Movies The Top Reasons People Use Credit Cards May Surprise You
Since the takeoff of credit cards in the early 1950s, credit cards and the way people use them have evolved tremendously. Today consumers have droves of credit cards to choose from and over 191 million Americans hold at least one. To learn more about America’s relationship with credit cards, GOBankingRates conducted a survey of over 1,000 adults who use credit cards.
When asked why they use credit cards, the top responses weren’t really about using credit to buy things at all. Surprisingly, for nearly a quarter of people (24.78%), perks and rewards are their primary purpose for using a credit card, while 21.51% use them mostly to build or repair their credit, meaning nearly half of respondents primarily use credit cards not to pay for things, but to achieve another goal. There was still a good portion, 15.86%, that use them primarily for everyday purchases, 10.7% to pay bills and 5.75% to finance large purchases. Finally, 14.07% use credit cards only for emergencies, 4.86% use them so they don’t have to carry cash and 2.48% use them to defer payment.
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Getting in better financial standing is top priority for many, with 43.9% of respondents saying that they are actively trying improve their credit score.
Knowing rewards and building credit are key factors, it’s interesting to note what mattered most to the respondents when choosing a new card. Annual fees and APRs are critical factors when choosing a card, with 37.56% of respondents saying that when picking a new credit card, no annual membership fee is the first thing they look for, while 25.67% seek low APR; 21.7% of respondents look for rewards and cashback perks, and 6.84% prioritize low balance transfer APR. Just 5.15% most value low fees and only 3.07% first consider the size of the bank.
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In a society where so many people are living paycheck to paycheck, it makes sense (however depressingly) that monthly bills are the most common expenses charged to a credit card, with 62.14% of respondents saying they’ve used their credit card to pay these; Travel is the second most popular expense, with 52.92% reporting they’ve used their credit cards to travel. 36.57% have used their credit card to cover medical expenses, 15.26% have used a card to make payments on another credit card, 11.69% used a card to pay for a vehicle, 10.21% have paid their rent or mortgage with a credit card, 8.33% used a card to pay for education and 3.96% used a card to pay a tax bill.
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In all, the survey shows that Americans are certainly using their credit cards, but are not as disastrously in debt as other research suggests and are motivated to open and use credit cards for more than just buying things. With more and more credit cards emerging, lending institutions will have to work harder to stand out in the crowd, and the best way they can do this is by attracting consumers with fat rewards, standout perks, no annual fees and low interest rates.
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GOBankingRates surveyed 1,009 Americans aged 18 and older from across the country on September 22 through September 23, 2021, asking twelve different questions: (1) Which of the following is the most important to you when it comes to picking a new Credit Card?; (2) How do you handle your Credit Card bill each month?; (3) Which Credit Card company do you trust the most?; (4) What age did you get your first Credit Card?; (5) What is your primary purpose for using your Credit Card(s)?; (6) Do any of the following statements apply to you? Select all that apply:; (7) Which Credit Card fees do you hate the most? Select one:; (8) How many Credit Cards do you own?; (9) What is your total current Credit Card debt?; (10) How Long do you think it will take you to pay off your Credit Card debt?; (11) Have you ever hit the credit limit on your Credit Card?; and (12) Have you ever charged any of the following to your Credit Card? Select all that apply: All respondents had to pass a screener question of: Do you own/use a Credit Card(s)?, with an answer of “Yes”. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
This article originally appeared on GOBankingRates.com: The Top Reasons People Use Credit Cards May Surprise You
